Faith, who has renters insurance in Baltimore, MD, writes us with a question we often hear as soon as a leasing office sends a tenant to us.
Why do I need renters insurance if the landlord already has insurance? Why do I need to protect the building? Is this a sign that the landlord might not have insurance? Now I’m a bit concerned because he’s expecting me to insure his building!
You’re making the assumption that the two policies would cover the same thing. They don’t by any stretch of the imagination.
Why Do I Need Renters Insurance If The Landlord Already Has Insurance?
Faith, who’s required to have renters insurance in Baltimore, MD, wants to know, why do I need renters insurance if the landlord already has insurance? That’s a great question, Faith.
Once a leasing office directs a tenant to us, one of the first questions we often hear is “Why do I need renters insurance if the landlord already has insurance?” People also ask why they need to protect the building. Isn’t that the landlord’s responsibility? Because different types of insurance cover different things, this question is moot.Sure, your landlord already has insurance for his liability and for the building itself. It’s a commercial policy, and the deductible probably starts at $25,000 or more. So if you negligently do $20,000 of damage to your apartment with a fire, it doesn’t even meet the landlord’s deductible. You can bet that the landlord in question will be suing the responsible tenant to recover that money. Do you want that judgement following you around?
Why Do I Need Renters Insurance If The Landlord Already Has Insurance?
Even if the damage does exceed the deductible, the landlord’s insurance company will subrogate or recover the money from the party at fault. That, in this case, would be you. So not only are you responsible for the deductible on the commercial policy, but the commercial carrier can come after you for anything they paid out because you’re at fault. Renters insurance covers $100,000 or more of liability. In the instant example, if you were to cause $20,000 or $80,000 of damage to the building with an accidental fire, renters insurance liability would protect you up to the policy limits. Fifteen dollars a month certainly beats a judgement for tens of thousands of dollars following you forevermore, doesn’t it?
Renters insurance liability also protects you from being sued by the other people you injure.
Let’s say a neighbor goes to the hospital with smoke inhalation. He’s going to want you to pay for his medical bills. Either you can shell out the ten or twenty grand for a short ER visit or your renters insurance can. Which one sounds like a better option to you?
Can I Sue My Landlord For Property Lost In An Apartment Fire?
Do I Need Renters Insurance If The Landlord Already Has Insurance?
No. No. And no. We’ve been doing this for many years, and we’ve heard some interesting explanations and oddball theories for causes of loss, but this ranks high on the list of answers we sort of presumed were common knowledge. Not only is your landlord not responsible for your personal property, but it’s actually illegal for him to insure your stuff! He has no insurable interest in your property. In other words, he suffers no loss if your property is stolen or burned in a fire. That means he can’t insure it because the insurance would be nothing but him profiting off someone else’s misfortune.
In short, your landlord has insurance, but…
Either he or his insurance company will come after you if you cause him to make a claim. Renters insurance protects you from this risk and protects your wallet and your assets as well! Contact Effective Coverage at (800) 892-4308 to find out how inexpensive it can be to protect yourself, or click above for an instant online renters insurance quote!